Kitty Ussher, economic secretary to the UK treasury, has published new regulations to fight money laundering and terrorist financing. The Money Laundering Regulations, which will come into effect on the December 15, are designed to ensure the UK’s response to money laundering at home and abroad is effective and proportionate.
“These regulations will strengthen further the UK’s defences against money laundering and terrorist finance,” said Ussher. “In line with the government’s financial crime strategy, these regulations introduce tough and targeted new measures where the risks are greatest, and at the same time ensure that businesses and consumers in low-risk situations face fewer burdens than previously.”
These regulations are the result of extensive consultation with both the private sector and law enforcement, including two written consultation documents, and carefully balance the views of different parties.
The main changes to the current regime involve extending supervision to all businesses in the regulated sector to secure greater compliance with anti-money laundering controls including, for the first time, estate agents, trust and company service providers and consumer credit businesses; strict tests to ensure money services business and firms that help set up and manage trusts and companies are not run for criminal purposes; requiring extra checks on customers that pose a higher risk of money laundering (for example foreign heads of state and non-face-to-face customers).
The regulations are intended to reduce regulatory burdens in low-risk areas. In practice, firms will be able to make fewer checks in low-risk situations, such as occupational pension funds and child trust fund administration. The number of identity checks will be reduced, with firms being able to rely upon checks made by certain other firms (for example solicitors and FSA-accredited financial advisers); and greater flexibility will be introduced to record-keeping rules so that firms can keep only the details that are important to them, rather than whole documents.